Statement of changes in working capital, Cost Accounting

Assignment Help:

A statement of changes in working capital assists us in locating where such changes took place. In the first example we try to demonstrate the increase or decrease in particular items and then try to categorize them in terms of decrease and increase in working capital. As working capital is measured through subtracting current liabilities from current assets, any raise in current assets and any reduce in current liabilities demonstrates a raises in working capital. Likewise, reduce in current assets and a raise in current liabilities represent a decrease in working capital.

 The statement of changes in working capital as Table no.1 explains that the raises in current assets amounted to Rs. 52 million, a main part of the increase occurring out of cash, inventory and receivable. Reduce in working capital came about mainly from the increased accounts payable, advances taken from customers and taxes payable. Total amount of reduce in working capital resulting from raise in current liabilities amounted to Rs. 25 million, hence showing a net raise in working capital of Rs. 27 million.

TOLLS INDIA LTD.

Statement of changes in Working Capital for the year ending December 31, 2000

                  (Rs. In Millions)

 

Dec. 31

2003

 

Dec. 31

2002

Increase

(Decrease)

Working Capital

Increase  Decrease

Current Assets

 

 

 

 

 

Cash

19.05

 

10.87

8.18

8.18

Accounts receivable

32.25

 

20.28

11.97

11.97

Loans and advances

42.58

 

33.82

8.76

8.76

Other current assets

17.20

 

15.93

1.27

1.27

Inventory

120.92

 

99.10

21.82

21.82

Total

232.00

 

180.00

52.00

 

 

 

 

 

 

Current Liabilities &

 

Provisions

Acceptances

4.74

 

3.02

 

 

1.72

 

 

1.72

Accounts payable

27.16

 

18.75

 

 

8.41

 

 

8.41

Advances against sales

26.60

 

20.28

 

 

6.32

 

 

6.32

Other liabilities

8.86

 

7.95

 

 

0.91

 

 

0.91

Interest accrued

2.64

 

2.00

 

 

0.64

 

 

0.64

Taxes payable

25.55

 

20.45

 

 

5.10

 

 

5.10

Proposed dividend

2.25

 

2.25

 

 

-

 

 

-

Bonus payable

3.40

 

2.35

 

 

1.05

 

 

1.05

Other provisions

3.80

 

2.95

 

 

0.85

 

 

0.85

Total

105.00

 

80.00

 

25.00

 

52.00

 

25.00

 

 

 

Working Capital

 

 

 

127.00

 

 

 

 

100.00

 

 

 

 

 

 

27.00

 

 

 

 

Increasing Working Capital

 

 

27.00

 

 

 

 

 

 

 

 

 


Related Discussions:- Statement of changes in working capital

Sgtatement of Cash Flow, “The statement of cash flows is the easiest of the...

“The statement of cash flows is the easiest of the basic financial statements to prepare because you know the answer before you start. You compare the beginning and ending balances

Calculate the following overhead variances, Planned                        ...

Planned                            Actual                Production                                                         92,000 units                     87,000 units

Determine the overhead allocation rate, Vintage Auto Company manufactures p...

Vintage Auto Company manufactures parts to order for antique cars. Vintage Auto makes everything from fenders to engine blocks. Each customer order is treated as a job. Vintage Aut

Who would be affected if the proposal is implemented?, Outdoors R Us owns s...

Outdoors R Us owns several membership-based campground resorts throughout the Southwest. The company sells campground sites to new members, usually during a get-acquainted visit an

Chapter 4 Fundamentals of Cost Analysis for Decision Making, 31. Special Or...

31. Special Orders Maria’s Food Service provides meals that nonprofi t organizations distribute to handicapped and elderly people. Here is her forecasted income statement for April

Business process re-engineering help to improve the profits, MLC, which was...

MLC, which was established in year 1998, manufactures a range of garden sheds and summerhouses using timber purchased from a various suppliers.The recently appointed managing direc

Calculate cost of direct manufacturing labour, Dixon Corporation was establ...

Dixon Corporation was established on January 1, Year 1.  The firm has 2 divisions, Division A and Division B.  Division A manufactures standard carpets, and Division B manufactures

Determine the total compensation cost, On January 1, 2013, VKI Corporation ...

On January 1, 2013, VKI Corporation awarded 12 million of its $1 par common shares to key personnel, subject to forfeiture if employment is terminated within three years. On the gr

Circle the categories of values method , You perform a travel cost study th...

You perform a travel cost study that looks at the relationship between the cost of visiting a lake (including costs of travel, value of time spent not working & any entry fees), it

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd